Not upheld: Card / payment disputes complaint against Lloyds Bank PLC

Decision detail

Summary

R, a limited company, complained that Lloyds Bank PLC refused to refund two unauthorised transactions totalling £1001.75 made on 21 May 2025 using R's card through PayPal's guest checkout facility. Miss Y, representing R, claimed the transactions were not authorised and did not recognise the merchant. However, PayPal confirmed the transactions used R's genuine card details and email address, and previous transactions using the same PayPal guest checkout process in March and April 2025 were acknowledged as authorised by Miss Y. The ombudsman found no evidence of card compromise, no plausible way an unauthorised third party could have obtained the card details, and no suspicious circumstances that should have alerted Lloyds to intervene. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman applied the Payment Services Regulations 2017, which require refund of unauthorised transactions except where the consumer breached obligations to keep security credentials secure. The ombudsman found no evidence of card compromise or a plausible way an unauthorised third party could have obtained the card details. The previous authorised transactions using the same PayPal guest checkout process, combined with Miss Y's recognition of those transactions, suggested the May transactions were likely authorised. The nature and delivery address of the purchases, while unusual for business activities, were not sufficiently suspicious to require Lloyds to intervene, as such variations are common in PayPal transactions.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website